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In praise of cash

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Re: In praise of cash

#191

Post by macintux »

fjdlwlv wrote: post #19
sparrish wrote: post #13

After having my card skimmed for the 4th time (at a gas station pump, at checkout at grocery store, etc), I decided to pay for everything with cash. It's not worth the hours it takes to clear up things with the bank and I get a better understanding of where my money is being spent when my wallet gets light.

How many hours will you spend at the ATM withdrawing cash? You get a better understanding of spending by feeling your wallet then by looking at your bank statements? That smells like a false pseudounderstanding.

You've clearly never tried to go cash-only. You feel the pain when you buy something; pulling out a credit (or even debit) card does not have nearly the same emotional angst.

Seeing those bills go away with the knowledge that they're not coming back is quite enlightening.

Re: In praise of cash

#192

Post by oculusthrift »

ThrowawayR2 wrote: post #190
oculusthrift wrote: post #182

Earlier quoted context omitted.

Of course not. But some percentage of customers still use cash. So the store might raise prices by 1.5 pct instead of the 3pct that Visa charges them. This essentially means those who use cash are subsidizing the card users. If they raise it the full 3 percent then the cash users are paying extra for a service they don't even use!

That doesn't negate either coldpie's or my points; if anything, having people use cash effectively helping to subsidize the "credit card tax" only adds more weight to the argument that it's an unreasonable arrangement that only serves to enrich the credit card companies.

yes it does. from a game theoretic perspective, it only would make sense for me to switch to cash if everyone else did so that the store wouldn't incorporate the extra fee into the price of their goods. However, one can't control others, they can only control their own behavior. So in a situation where there goods cost extra, because others are still using their cards and the owner has to markup prices, the only rational thing to do is to use the payment method you prefer. And economically speaking, all the cash users are paying extra for a good they don't use.

Re: In praise of cash

#193

Post by [deleted] »

eric_the_read wrote: post #129
mrec wrote: post #102

Earlier quoted context omitted.

Well yes, but surely that's something that cash does even better, isn't it? I take a fixed amount of cash out once a week and that's everything I'm going to spend that week. Not only can you not spend money you don't have, you can't accidentally spend more money than you were planning to spend. (I carry a few extra weeks' buffer for emergencies, but could put that in a separate pocket or something if it ever became a…

The difference is that I generally feel safe carrying a debit card around where I wouldn't with even $100 in cash. In the US, we are just getting chip cards for debit, so even if my wallet is stolen, I can just call the bank and cancel it, but I can't do that with cash. I'm with you on the credit cards-- for me, they're just a point-generating mechanism-- but it's easy for me, since if I accidentally go over my budge…

[deleted]

Re: In praise of cash

#194

Post by ghaff »

greggman wrote: post #183
M_Grey wrote: post #78

Earlier quoted context omitted.

A cashless society would be an attempt to create a society that lacks basic economic freedom, but it would also fail. People will simply return to barter, and the use of whatever precious metals/stones/etc are hot that year.

If I understand correctly the Netherlands plan to go cashless. There were already cashless fast food restaurants when I was there in 2013. No cash allowed. http://www.europeanpaymentscouncil.eu/index.cfm/newsletter/a...

Although that same link also says:

"Although selected shops, petrol stations, railway stations and government services, each for their own reasons, have decided not to accept cash any longer, we do not foresee the Netherlands will evolve into a completely cashless society. In fact, the consensus is that the cash infrastructure will remain ubiquitous and that it is up to payers and payees to agree on their payment method."

That said, it's not hard to imagine that if you get to 90% or 95% cashless, a lot of retailers aren't going to want to bother with cash any longer.

Re: In praise of cash

#195

Post by thraway2016 »

oculusthrift wrote: post #171
coldpie wrote: post #169

Earlier quoted context omitted.

You're also sending a 3-5% tithe to the payment processor (credit card company, bank, electronic payment provider) with every transaction instead of giving that money directly to the service provider.

Maybe this is harsh, but why would I care? It sounds like a problem for the store. And many of the mom and pop shops around me require a minimum purchase or charge a 50 cent fee for using a card.

Because as much as HN praises the notion of passive income streams, widespread parasitism by monopolistic and unproductive sectors of the economy are an anchor on the broader, actually-productive economy.

The payment card industry is a parasite on all of us, full stop.

Re: In praise of cash

#196

Post by ycmbntrthrwaway »

M_Grey wrote: post #78
CPLX wrote: post #9

The core concept to remember I think is that there are two ways to pay for things: * Ways that involve cash or cash equivalents * Ways where a purchase requires the permission of someone else Just think of the word authorization, which is a required element of essentially all non-cash transactions. It has the word authority embedded right in it. If you're OK with that concept, you are necessarily OK with the idea tha…

A cashless society would be an attempt to create a society that lacks basic economic freedom, but it would also fail. People will simply return to barter, and the use of whatever precious metals/stones/etc are hot that year.

It is unlikely that people will actually return to barter and transfer physical goods such as gold all the time, because it is expensive. However, they can usually promise to transfer value later. Such transactions will mostly cancel out and the amount of actually transferred goods is greatly reduced.

What you end up with is informal system of money transfer such as https://en.wikipedia.org/wiki/Hawala

Such a system will emerge as soon as people are prohibited to pay directly to each other. Instead of paying cash to you, I will pay for you in restaurant.

Re: In praise of cash

#197

Post by ghaff »

mamon wrote: post #175
matthewmacleod wrote: post #88

Earlier quoted context omitted.

I'm just not sure you can construct a coherent argument around that though. Obviously a seller isn't obligated to accept cash; is there a suggestion that we should legally require sellers to do so?

>> a seller isn't obligated to accept cash Isn't he? I don't know how it works in US, but at least in Poland every banknote has printed statement that it is "the legal payment method ". The law institutes a fine for any seller that refuses payment in cash.

A seller in the US absolutely does not need to accept cash. Certainly most online merchants won't accept cash but there are also examples like onboard purchases on airlines where cash isn't accepted.

Relevant statement from US Treasury: https://www.treasury.gov/resource-center/faqs/Currency/Pages...

Re: In praise of cash

#198

Post by overcast »

beambot wrote: post #68
jliptzin wrote: post #56

Earlier quoted context omitted.

The bulk of that transaction fee gets rebated back to the consumer as points, cash back, etc. I only use 2% cash back cards.

So anyone who isn't creditworthy (ie. poor) pays additional tax in the form of higher-priced goods. But to heck with them for being poor, right, because you get the convenience and cash back?

To be fair, the poor shouldn't be racking up credit card bills. That's just adding fuel to the fire. A world existed before credit cards became commonplace.

Re: In praise of cash

#199

Post by modeless »

problems wrote: post #150
modeless wrote: post #146

Earlier quoted context omitted.

It doesn't solve anonymity, but it does solve the permission problem. You can transfer unlimited amounts of Bitcoin at any time and place without anyone's permission or approval.

But they can still come and beat you for it. Other cryptocurrencies like ZCash, Monero, etc solve this in a more elegant way by making transaction actually anonymous.

While Bitcoin is not completely anonymous, it is also not completely transparent. The blockchain does not contain names and things can be obfuscated in various ways. Furthermore, a truly 100% anonymous system of money without any exceptions may not actually be desirable from a societal point of view, as it would enable things like assassination markets.

Re: In praise of cash

#200

Post by mrb »

colorint wrote: post #118
M_Grey wrote: post #78

Earlier quoted context omitted.

A cashless society would be an attempt to create a society that lacks basic economic freedom, but it would also fail. People will simply return to barter, and the use of whatever precious metals/stones/etc are hot that year.

There's two things working against this theory. First, such systems only work in the presence of a unit of account, because otherwise it's impossible to coherently price items in a pure unlike-for-unlike barter system. The unit of account would, of course, be money. So what you're talking about isn't a collapse of the money system, but black markets. When you say "people who want to keep their transactions off the bo…

"Second, the value of state money is maintained by the state's ability to levy taxes [...] Not coincidentally, this is also the biggest hurdle for serious adoption of cryptocurrencies."

It is not a hurdle. In fact Bitcoin's growing adoption and increase of value over the last eight years has already demonstrated your worry is a non-problem. Money has value because people demand it. It doesn't matter if demand comes from the government or a merchant. Both can change their mind about what they'll accept tomorrow as money (as history has shown many, many times.)

Sure, on a practical level a currency's value will have a more solid foundation if (1) the government that demands taxes is big and stable, or (2) if a large number of merchant accepts it. But again, fundamentally there is no difference between (1) and (2). Multiple cryptocurrencies already have value resting on a more solid foundation than the value of currencies in many smaller countries.

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